No sign yet of the Brexit vote shaking UK’s impressive jobs performance

Further slowing of wage recovery highlights need to tackle major problems on pay

The UK’s record employment performance has continued through the summer, with no sign yet of any ‘Brexit effect’, the Resolution Foundation said today (Wednesday) in response to the latest ONS labour market figures.

The Foundation notes that any ‘Brexit effect’ was unlikely to be found in figures covering the period May-July 2016. Indeed, the latest figures show that the employment rate has stabilised at 74.5 per cent, matching the record high achieved last month.

With no big changes in unemployment or the number claiming unemployment-related benefits, the picture is one of stability going into the summer months, says the Foundation.

Rising inflation in July meant that real pay growth fell slightly to 1.7 per cent – its lowest level in 12 months. The Foundation notes that the weakness of the UK’s pay recovery means average weekly earnings are still £21 lower than their pre-crisis peak.

With inflation expected to continue rising, the Foundation warns that a big increase in pay growth will be needed to prevent another painful squeeze.

Laura Gardiner, Senior Policy Analyst at the Resolution Foundation, said:

“Our first look at the post-Brexit vote labour market shows a similar picture to the one we had before the vote. It could be some time before we see any ‘Brexit effects’ – good or bad – in the official figures.

“Employment has stabilised at an impressively high level, which offers an excellent base for a full employment drive.

“However pay growth has got stuck at worryingly low levels, particularly with rising inflation expected round the corner. This problem long predates the Brexit vote but the stakes on turning it around have now got higher. Stronger pay settlements and a huge productivity drive will be needed to change this and prevent another painful wage squeeze in the coming years.”